Effective February 25, 2020, Diversicare Healthcare Services, Inc. (the “Company”) entered into a Sixth Amendment to its Second Amended and Restated Term Loan and Security Agreement (the “Amended Mortgage Loan”), an Eighth Amendment to its Third Amended and Restated Revolving Loan and Security Agreement (the “Amended Revolver”) and a First Amendment to its Revolving Loan and Security Agreement. The amendments extend the maturity date of each of the loan agreements to September 30, 2021. Also, in connection with these amendments, the Company obtained from its syndicate of banks a waiver of the minimum fixed charge coverage ratio covenant applicable to the Amended Mortgage Loan and the Amended Revolver for the period ending December 31, 2019 and made certain changes to the financial covenants of these loan agreements, as follows.

to the amendments, the Company’s Fixed Charge Coverage Ratio, as defined under the Amended Mortgage Loan and the Amended Revolver, should not be less than 1.01 to 1.00, for the fiscal quarter (i) ending March 31, 2020, measured on the last day of the applicable fiscal quarter on a trailing three month basis, (ii) ending June 30, 2020, measured on the last day of the applicable fiscal quarter on a trailing six month basis, (iii) ending September 30, 2020, measured on the last day of the applicable fiscal quarter on a trailing nine month basis, and (iv) ending December 31, 2020 and for each fiscal quarter thereafter, each measured on the last day of the applicable fiscal quarter on a trailing twelve month basis.

Additionally, the amendments provide that the Company’s Adjusted EBITDA, as defined under the Amended Revolver, should not be less than (i) $9,500,000 for the fiscal quarter ending December 31, 2019 on a trailing twelve month basis, (ii) $3,250,000 for the fiscal quarter ending March 31, 2020, measured on the last day of the applicable fiscal quarter on a trailing three month basis, (iii) $6,500,000 for the fiscal quarter ending June 30, 2020, measured on the last day of the applicable fiscal quarter on a trailing six month basis, (iv) $9,750,000 for the fiscal quarter ending September 30, 2020, measured on the last day of the applicable fiscal quarter on a trailing nine month basis, and (v) $13,000,000 for the fiscal quarter ending December 31, 2020 and for each fiscal quarter thereafter, each measured on the last day of the applicable fiscal quarter on a trailing twelve month basis.

About Diversicare Healthcare Services, Inc. (NASDAQ:DVCR)

Diversicare Healthcare Services, Inc. provides post-acute care services to nursing center patients and residents in approximately nine states, primarily in the Southeast and the Southwest United States. The Company’s post-acute care services to patients and residents include skilled nursing, ancillary healthcare services and assisted living. In addition to the nursing, personal care and social services that are provided in long-term care centers, the Company offers a range of rehabilitative, respiratory and other ancillary services. The Company’s operations consist of approximately 60 nursing and senior housing centers with approximately 6,060 licensed nursing beds. Its nursing centers range in size from 48 to 320 licensed nursing beds. The nursing centers provide nursing healthcare services, including nutrition services, recreational therapy, social services and laundry services. The Company operates in Alabama, Florida, Indiana, Kansas, Kentucky, Missouri, Ohio, Tennessee and Texas.